At mid-day, the NYT business section has headlines, one above the other, saying that the "Oil Hits Record" and "Dollar Reaches New Low Against Euro." While these are presented as distinct stories arguably they are the same story.
Imagine that the price of oil stayed constant in euros and the dollar fell by 4 percent against the euro (roughly what it has done over the last month, depending on the dates chosen.) Then we would expect that the price of oil would have increased by 4 percent in dollar terms. While the fall in the dollar against the euro and the rise in oil prices as measured in dollars have not been exactly the same, they are in the ballpark. In short, much of the recent rise in the price of oil for people in the United States is not actually oil prices rising worldwide, rather it is simply a case of the dollar declining in value against other currencies and also against commodities, such as oil.
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